The economy added a meager 49,000 jobs in January and the unemployment rate fell to 6.3 percent as the size of the workforce shrank, indicating the continuing fragility of the recovery. Economists expected that 50,000 jobs would be added and that the unemployment rate would remain unchanged.
The January report, the first monthly release under President Joe Biden, is an improvement from December, with a turnaround of 227,000 posts. However, it does not even believe that the millions of people who estimate economists have dropped out of the workforce and are no longer looking for work. Nearly 18 million Americans still receive some form of unemployment benefit.
“The prime numbers fail to capture all the distress,” said Mark Hamrick, senior economic analyst at Bankrate. ‘Just one example: About 6 million work part-time but want full-time work, while another 7 million have the workforce but want to work and are not considered officially unemployed. I think we are still in the dark days of winter regarding the pandemic and the economy. ”
As a significant part of the economy is still closed, the monthly figure is still four times the level of pre-pandemic.
“Once the vaccine is widely distributed and our numbers start to decline, there will be a pop,” said Philip Noftsinger, executive vice president at CBIZ, Inc., a small business development consulting firm.
Economists and policymakers say U.S. families and mom-and-pop businesses will need more support to survive until spring. ‘The consumer is going to spend when things reopen. We just have to get out there, ”said Noftsinger.
Although more places in the country are easing restrictions, Noftsinger said people’s unwillingness to go shopping, eat out and engage in other social activities is a ‘soft cost’ that these businesses bear. Even in the absence of restrictions, there is a fear factor that weighs heavily on Main Street’s ability to bounce back. “Small businesses are still struggling,” he said.
A new report from the Congressional Budget Office concluded that it will take until 2024 for the economy to get full employment again, and Finance Minister Janet Yellen said the country “urgently” needs more help has. President Joe Biden and the Congress Democrats are campaigning for a $ 1.9 billion package that will include $ 1,400 stimulus checks for many Americans.
Economists who have been warning for months of a K-shaped recovery said this support is needed because the pandemic is still causing uneven pain. This left the travel, dining and entertainment sector particularly badly behind. A stronger economic recovery involving these sectors has been hampered by worrying new virus variants and a slow, decomposed vaccine development. ‘We need to see more work in leisure and hospitality added. That’s the core of the job we lost, ”Hamrick said.
While Americans are still buying, spending on services remains very low, he added. “It speaks to the fact that the economy still has a way to heal further.”